State-owned Punjab National Bank on Thursday raised the marginal cost of funds-based lending rate (MCLR) by 0.05 per cent, or 5 basis points, across tenors, making most of the consumer loans costlier.
The benchmark one-year tenor MCLR, which is used to price most consumer loans such as auto and personal, will be at 8.90 per cent against the earlier rate of 8.85 per cent, PNB said in a regulatory filing.
The three-year MCLR stands at 9.20 per cent, up 5 basis points.
Among others, the rate of one-month, three-month and six-month tenors will be in the range of 8.35-8.55 per cent.
The MCLR on overnight tenor will be 8.30 per cent against 8.25 per cent.
The new rates are effective from August 1, 2024.
On Wednesday, another public sector lender Bank of India also announced an increase in MCLR by 5 basis points for one year tenor to 8.95 per cent.
However, the rates were unchanged for the remaining tenors.
MCLR
In essence, MCLR is a crucial factor in determining the cost of borrowing for individuals and businesses in India.
MCLR is essentially the minimum interest rate a bank can charge on a loan. This rate is determined by considering the bank’s cost of funds, operating costs, and a certain profit margin.
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